In short, when I try to move my knights in my city to an army, it moves them, but when I close the army management window, the knights are still there in the city view, but also in the army I moved them into.

Are you sure that you didn't produce all of them? Sometimes game is buggy and produces more and more units, even though you didn't choose that. Try relogging, and be sure that your stables isn't producing any more units.

Also, when you are viewing your army/town screen, same units will stack one on each other.